“While the test for an injunction is well settled and set-out…there are some interesting aspects of applying that test in the context of proposed pipelines,” wrote Calgary-based Blakes partners Dalton McGrath and Micheal O’Brien last week.

The general test for granting an injunction has three branches:

Is there a serious issue to be tried;

Will the applicant suffer irreparable harm if the injunction is not granted; and

Which party will suffer the greater harm from granting or refusing the remedy pending a decision on the merits?

Serious issue

According to Blakes, the threshold for the first branch—that the applicant is “neither vexatious or frivolous”—is actually quite low. But there are exceptions.

In the context of pipelines, a number of decisions have found no serious issue if a robust regulatory process approved the pipeline and has jurisdiction over it. In those cases, seeking an injunction is considered a collateral attack on the regulatory decision-making process and is denied.

The lawyers write that courts may not admit a serious issue to be tried if agreeing to consider the injunction against a pipeline would essentially amount to a final determination. In other words, given the time, expense and approval process complexity, undertaking to examine the merits of an injunction could constitute the delay sought by pipeline opponents.

Irreparable harm

The second branch of the test is typically the most difficult to establish. The applicant must establish irreparable harm that is beyond monetary repair.

“It must establish harm of such a nature that no fair and reasonable redress may be had unless injunctive relief is granted and the refusal to grant the injunction would be a denial of justice,” McGrath and O’Brien wrote.

Irreparable harm typically refers to the nature of the harm suffered rather than its magnitude.

Pipeline opponents frequently make allegations of health and other environmental consequences. But those allegations are often speculative in nature and do not satisfy the evidence required for this test.

Balance of convenience

The final branch of the test involves deciding which party will suffer the greater harm from granting or refusing an injunction before the case proceeds to trial.

“The expenditure of money, time and commercial activity, including obtaining regulatory approvals, has been recognized by the courts as an important consideration in denying injunctive relief. This is particularly so in the context of major pipelines,” wrote McGrath and O’Brien.

In the precedent Dastous v. Canadian Natural Resources Limited, the court noted that an injunction would have the result of delaying a substantial development project—a project that, at full production, would supply hundreds of thousands of barrels per day of crude oil over a significant period of time. In those circumstances, the court found that the balance of convenience favoured the denial of the injunction since to grant it would undermine a project that was “critical in sustaining Canada’s oil needs for the future.”

It is also common and well-established practice that an applicant seeking an injunction is responsible for the respondent’s damages if it is ultimately determined that an interim injunction should not have been granted, the Blakes partners wrote.

In some jurisdictions, posting an amount sufficient to cover those damages is required and can prove “overwhelming” for most applicants.